Tobacco Tax Hike: What it means to all
If there’s anything local convenience stores like, it’s a flurry of eager customers hoarding packs and packs of cigarettes before taxes skyrocket on July 1st, 2013.
On the said date, Minnesota’s tobacco taxes have increased by $1.60 per pack which adds up to the total state tax to $2.83 per pack. This increase means a Marlboro will now be at a state minimum of $7.83 per pack of 20’s.
What it means to the business
According to local stores and gasoline stations, their sales Sunday night saw the most dramatic spikes in their sales. Most of the stores have even reported doubling their monthly sales in the last week of June, just in time before the taxes go crazy. Another store reports selling 10 cartons in less than 20 minutes, and a woman claims to have bought stocks amounting to approximately $500, a definite steal compared to when Monday’s taxes go up.
Unfortunately for these stores, the almost sell-out performance of that week was met with very disappointing results come Monday.
What it means to the smokers
The increase in taxes was met with mixed inputs from the public’s end. While it was expected that smokers will react negatively, there are some heavy smokers who commented that the taxes may not impact their smoking habits, although they expect that it will affect their monthly budget.
A small number of smokers though, commented that higher taxes be considered as a sign to quit, or at least to motivate them to do so. Some also noted that they may resort to using electronic cigarettes, which are taxed less than tobacco.
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WHO’s programs not only improve overall health – taxes too
Smoking-related diseases claim at least 6 million lives annually and the numbers are projected to increase another 33% in less than 20 years. With this, the World Health Organization (WHO) spearheaded the Framework Convention on Tobacco Control in 2005 which aims to prevent premature deaths all over the world caused by smoking.
The program is designed to curb and minimize tobacco use, through raising taxes to 75% of the retail price, limiting smoking areas on public places, printing of warnings on cigarette packages, and banning of promotions and advertisements that encourage the act of smoking.
Of these methods, increasing taxes on cigarettes may prove to be more effective in lowering smoking-related deaths, based from an independent study conducted by the WHO.
According to this study, limiting designated public smoking areas could potentially prevent 2.5 million smoking-related deaths, while increasing taxes could prevent another 3.5 million fatalities.
Since its implementation in 2005, the said program has saved many lives in over 40 countries worldwide. In addition, higher taxes paid to purchase a pack of cigars can be redirected by the government to improve health and education systems.
Apart from impacting mortality rates and government taxes, the program, if effective, could eventually result to more affordable health care cost and healthier babies that do not suffer from the harmful monoxides from the outside environment.
According to Dr. Douglas Bettcher, from WHO’s non-communicable diseases department, “it is a win-win situation for health and finance ministries to generate revenues that have a major impact on improving health and productivity.”
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Higher taxes for the new fiscal year
July 1st marks the start of a new fiscal year for most states in America, and a couple of changes related to taxes and penalties have been implemented.
Monona, Wisconsin
A law has been implemented which focuses solely on bullies and their parents. The act of bullying ranges from schoolyard fights to cyber bullying. Offenders will have to pay $114 on the first offense, and $177 for any succeeding offenses. This law encompasses kids aged 12 and over; in some extreme cases, parents of kids less than age 18 may also be fined for their child’s behaviour. The fines, referred to as “bullying taxes” are just one of the many that are expected to be implemented in the state.
Florida
Slower drivers on the fast lane need to watch their rear views more often to ensure they are not stalling cars behind them. Florida’s “road rage” law makes it illegal for cars to drive more than 10 miles below the speed limit if another car is trailing them.
According to Lt. Jeff Frost of Florida Highway Patrol, a violation of this kind will appear the same way as a speeding ticket – and in effect could lead to a higher insurance bill and taxes.
On the other states, shopping also takes a hit. In Arkansas, consumers will be slapped an additional 0.5% in sales taxes, bringing the state’s taxes to 6.5%. For a $600 gadget, this means an additional $3 on the bill. Furthermore, online shopping also takes a hit. In Minnesota, consumers will now be charged higher sales taxes on online purchases. A $9.99 game will cost an additional 69 cents on sales taxes.
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